December 14, 2009 - Phil Hodgen

HSBC/Geneva has client data stolen by former employee

We’ve heard this song before. Disgruntled bank employee grabs secret information about customers, spills the beans to the tax authorities in another country.

A couple of years ago it was Liechtenstein and the LGT Bank. Now it is HSBC in Geneva. This time it is French taxpayers who are feeling the heat.

The nut grafs:

A former employee of the bank stole client data between late 2006 and early 2007, the bank confirmed yesterday.

However, it insisted that only ten of the bank’s wealthiest customers had been affected by the theft, which was discovered during a period of police surveillance in 2008. The bank was told of the security breach after a prosecutor interviewed the person suspected of stealing the data.

However, this morning Le Figaro, the French newspaper, said that up to 4,000 French clients were named on the stolen list, amounting to €6 billion (£5.4 billion) of assets.

The French authorites said that their Swiss counterparts had formally asked them to co-operate with the inquiry into the theft. They also admitted that the stolen list was used to compile a list of 3,000 French people with Swiss bank accounts suspected of tax evasion. [Emphasis helpfully added by mygoodself.]

Let’s see. So far the casualty list (that I know of) is:

1. Bank Julius Baer, courtesy of Rudolf Elmer.

2. UBS, via Bradley Birkenfeld.

3. HSBC, via Mr. Anonymous (see link above).

4. LGT, via Heinrich Kieber.

Memo to all personnel: There. Is. No. Such. Thing. As. Secrecy. If you’re in a situation where you’re relying on secrecy to reduce your tax bill and keep you out of trouble, remember that.

Secrecy may work for a while, but if you need some sound legal and tax advice, go read Ernest Hemingway. In “The Sun Also Rises” you will find this:

“How did you go bankrupt?” Bill asked.

“Two ways,” Mike said. “Gradually and then suddenly.”

That’s the way bank secrecy as a tax strategy is devolving.

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